By: Matt Weller, Head of Market Research
The beginning of a new month marks a good opportunity to review the seasonal patterns that have influenced the markets since 1990.
As always, these seasonal tendencies are just historical averages, and any individual month or year may vary from the historic average, so it’s important to complement these seasonal leans with alternative forms of analysis to create a long-term successful trading strategy. In other words, past performance is not necessarily indicative of future results.
S&P 500 Seasonality – S&P 500 (Price-Only)
Chart Source: TradingView, StoneX.Please note that past performance is not necessarily indicative of future results.
Historically, July has been a solid month for US stocks, with the broad S&P 500 index sporting an average (price-only) return of 1.4% over the last 35 years, tied for the third-best month. Interestingly, the S&P 500 has finished higher in each of the last 9 Julys, an impressive streak that could stretch to a decade over the next few weeks if economic data and US trade policy don’t deteriorate.
Nasdaq 100 Seasonality – NDX (Price-Only)
Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.
Looking at the above chart, the Nasdaq 100 has historically seen solid performance in July, to the tune of +2.1% since 1990. Like the S&P 500, the Nasdaq 100 burst out to record highs last month, putting the momentum firmly in the bulls’ camp. With heavily-weighted “Magnificent 7” names like Nvidia, Microsoft, and Meta Platforms/Facebook in record territory of their own, the path of least resistance remains higher for now.
Volatility Index Seasonality – VIX
Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.
July has historically been a month where stock market volatility rises, with the VIX index rising by an average of 5.0% since 1990. Following the seasonal trend, the VIX declined last month to drop below 17 (approaching the 2023-2024 average in the mid-teens). Uncertainty around US trade policies, fiscal policy, and geopolitical tensions continues to decline, but those themes will be critical for anyone interested in volatility to monitor throughout this summer and beyond.
Gold Seasonality – XAU/USD
Chart Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.
Turning our attention to commodities, July has historically been the third-most bullish month for gold performance, with an average rise of 0.9% going back to 1990. The yellow metal took a breather in both May and June, consolidating entirely within April’s range and finishing essentially unchanged near the $3300 level. After a two-month consolidation, gold is well positioned to extend its historic rally amidst still-falling interest rates globally, trade uncertainty, and a well-established uptrend going back to late 2022, and now the seasonal trend aligns with those bullish fundamental factors.
WTI Crude Oil Seasonality – WTI Chart
Source: TradingView, StoneX. Please note that past performance is not necessarily indicative of future results.
Last but not least, WTI Crude Oil has historically gained ground in July, with an average gain of +0.8% over the last 35 years. WTI was volatile in June amidst the airstrikes between Israel, Iran, and (eventually) the US, but with geopolitical tensions simmering down as of writing, oil prices remain below a nearly 2-year bearish trend line, limiting the prospect of substantial gains for now. A confirmed break above that barrier in the $75 area would be needed to shift the longer-term trend back in favor of the bulls.
What are the major events and indicators on tap for the global economy that could charge volatility in markets and reshape deeper fundamental themes? Sign up for the updated Global Macro Calendar updated each week with a two week look ahead of the top events!
Sign Up
-- Written by: Matt Weller, Global Head of Research
StoneX TV content is created, produced, and distributed solely by StoneX Media Ltd (“StoneX TV”) and is provided for informational and educational purposes only. StoneX TV does not provide investment, financial, legal, or tax advice and does not make any recommendation or endorsement of any investment strategy, transaction, or financial instrument. Nothing in this content constitutes, or should be construed as, investment advice or a recommendation to buy, sell, or hold any financial instrument, including securities, futures, derivatives, digital assets, foreign exchange products, or CFDs. This content does not constitute an offer, invitation, or solicitation to engage in any investment activity. The information presented is general in nature and is not tailored to the financial situation, investment objectives, or risk tolerance of any specific person. You should not rely on this content as a substitute for independent professional advice. Investing and trading in financial instruments involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. Any views or opinions expressed are those of the presenter at the time of publication and are subject to change without notice. Such views may not necessarily reflect those of StoneX Media Ltd or its affiliates. StoneX Media Ltd and its affiliates, including StoneX Group Inc., may from time to time have positions in, or engage in transactions involving, the financial instruments referenced. This content may include general market commentary and opinion. It does not constitute independent investment research and has not been prepared in accordance with legal requirements designed to promote the independence of investment research. StoneX Media Ltd is not authorised or regulated to provide investment services and does not act in a fiduciary capacity. StoneX Media Ltd is incorporated in Ireland and operates in accordance with applicable Irish law. It is a wholly owned subsidiary of StoneX Group Inc. and is a separate legal entity from other subsidiaries within the StoneX Group, which may be regulated in various jurisdictions. StoneX Media Ltd does not act on behalf of, or provide services for, any regulated affiliate. This content is not directed at, and may not be distributed to, any person in any jurisdiction where such distribution would be contrary to local laws or regulations. Supporting documentation for any claims, comparisons, statistics, or technical data may be made available upon reasonable request, where applicable.
Our subscribers have access to comprehensive market analysis from StoneX spanning commodities, equities, currencies and more.
The S&P 500 has pushed to a fresh high while the Nasdaq 100 has refused to follow, and that split in leadership carries more information than the headline index level. James Stanley walks through why the same sequencing appeared before the tech bust and what it changes about the bear case on stocks.
Rising crude oil prices add to inflation concerns as Treasury yields weigh on equity sentiment. Pullbacks in oil and yields offer relief, but the Dow Jones rebound has not repaired its broken uptrend.
Beneath a headline index that still looks strong, the DAX has slipped below a short-term moving average that traders use to read momentum. Fawad Razaqzada explains how momentum weakens before price does, and what thins the support structure underneath a European equity index.
Our market expertise, advanced platforms, global reach, culture of full transparency and commitment to our clients’ success all set us apart in the financial marketplace.
Reach
With access to 40+ derivatives exchanges, 180+ foreign exchange markets, nearly every global securities marketplace and numerous bi-lateral liquidity venues, StoneX’s digital network and deep relationships can take clients anywhere they want to go.
Transparency
As a publicly traded company meeting the highest standards of regulatory compliance in the markets we serve; our financials and record of accomplishment are matters of public record. StoneX’s commitment to “doing the right thing over the easy thing” sets us apart in the industry and helps us build respect, client trust and new partnerships.
Expertise
From our proprietary Market Intelligence platform, to “boots on the ground” expertise from award-winning traders and professionals, we connect our clients directly to actionable insights they can use to make more informed decisions and achieve their goals in the global markets.
